Hmmmm,,
I would definately grill the seller about the bottom end of the motor. If it is indeed a 535 you want the bottom end to have been rebuilt with better quality bearing and a better con rod and big end. If it has a stock 350 bottom end that may spell granade like doom in the future.
It does have a 500(535 capably) head. Nice air filter and pipe. RH shift has been done but it is only a 4 speed so it is worth asking if any work has been done to the clutch. I also looks like an oversized fuel tank.
Appears to have an Iron jug, which is unfortunate, if I was boring a 500 out to 535 I myself would put alloy on just for the improvement in cooling.
Looks to have a smaller 28mm or so carb, a 30mm or 32mm would serve a 535 better.
Nice bike, IMO $4000 would be pushing the top of the value if it has a good bottom end $3000 to $3500 tops. If it has a stock 500 bottom I would give maybe $2000 and a 350 bottom $1500.